Tieling Newcity Investment Holding (Group) Limited engages in urban infrastructure construction activities in China. It is also involved in land development, water supply, sewage treatment, taxi operation, and advertising media businesses. The company was founded in 2006 and is based in Tieling, China.

China

Tieling Newcity Investment Holding (Group) Limited

Real Estate

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

000809.SZ reported revenue of CNY 381mn in the last 12 months, down 1% from FY24. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 12% from FY24 to CNY -0.11.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 21ppts over past six months and grown 6ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -20.5% in the last 12 months, up from -91.6% in FY23. 

Historically, 000809.SZ has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -23.6%, a growth from -188.5% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -2.4% in the last 12 months, a decrease from -2.0% in FY23. 

Tieling Newcity Investment Holding (Group) Limited reported a return on equity (RoE) of -3.3% in the last 12 months, down from -3.1% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -2.8%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.4 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

000809.SZ has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, low margin volatility, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, weak debt servicing capacity, and inadequate interest coverage.

In highly turbulent market conditions, 000809.SZ is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, 000809.SZ is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to substantial. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. Specifically, the stock is overpriced on P/FCF. 

Tieling Newcity Investment Holding (Group) Limited

CN¥ 3.11

3

Tieling Newcity Investment Holding (Group) Limited

CN¥ 3.11

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 3.11

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